Inside the Psychology of Productivity

Burned out? Can't get it all done? The problem might
be in your head.

You wake up with it in the morning
and go to bed thinking about it at night: an ever-crushing load of emails,
meetings, conference calls, and tasks that needed to get done yesterday. Family
time means reading sales reports in the room where your kids are playing video
games. For entrepreneurs, there's soooo much to get done--85 percent of
fast-growth-company CEOs work 10 or more hours a day, according to a recent
survey of the Inc. 500. Under such circumstances, personal productivity
isn't just a metric. It's also a mandate.

Recently, a glut of tools and
systems has emerged to help you measure, manage, and maximize what you
accomplish. But not all impediments to productivity result from poor
organization. Many are psychological. Behavioral economics reveals the wacky
ways people think about financial costs and rewards. Similarly, psychologists,
business researchers, and even philosophers are illuminating people's
idiosyncratic approaches to getting stuff done.

Productivity, or at least how
productive you consider yourself, is surprisingly subjective. As a leader, your
most important work--mulling strategy, blue-skying for innovation, imagining
the future--may not feel all that productive because it is open-ended and the
outcome is uncertain. At the same time, more (subjectively) unimportant work,
like clearing out your inbox, can leave you quite satisfied.

Often, there's an irrational
component to whether you think you've gotten much done. "If I have 10
things I want to finish in a day and I finish five, I get frustrated because I
am not productive," says Gregory J. Redington, president of Redcom, an
engineering and construction company in Westfield, New Jersey. "If I have
five tasks and I finish all of them, I feel productive, even if it's the exact
same five. My instinct as an entrepreneur is to plan to do all these things.
But I want to believe I've won at the end of the day, so I try to put fewer things
down."

Clayton Mobley, co-founder and CEO
of Spartan Value Investors, a real-estate investment business in Birmingham,
Alabama, admits that the state of his desk has a lot to do with whether he
thinks he has accomplished enough on a given day. "There are two piles on
the sides of my desk," he says. "If one of those piles is gone by the
end of the day, I feel productive. Even if I just put it in a drawer."

No matter how you try to trick
yourself into feeling more productive, there are just 24 hours in a day, and
you almost certainly are not making the most of them. Here's what you can do
about that.

Get
to the Root of Your Procrastination

Procrastination is a particular
problem for entrepreneurs, who often must tackle work in which they have no
experience and no familiar starting point. And of course, when you are
responsible for everything, there's always something else you could be doing.
Many consider procrastination a moral failing, a weakness of will. But Timothy
Pychyl, a professor of psychology at Carleton University in Ottawa, Ontario,
calls procrastination an "emotion-centered coping strategy." He
suggests that if you understand what's motivating (or--more
accurately--demotivating) you, you can begin to address it. "Many of these
emotions are not conscious," says Pychyl. "So the first step is to
have some awareness of how you are feeling. 'Why do I keep not wanting to do
this?' "

The reasons people shrink from
particular tasks typically vary with the stage of a project, Pychyl explains.
In the inception and planning stages, you procrastinate because you don't find
the work interesting or meaningful. In the action stage, you procrastinate
because the project isn't well structured, which creates uncertainty about how
to proceed. Fear of making a poor decision can also be immobilizing. "With
uncertainty comes fearfulness," says Pychyl. "You have to acknowledge
that fear."

Another culprit is perfectionism:
People envision outcomes so outstanding that their expectations become more
intimidating than inspirational. "It's like you're practicing the high
jump, and when you set the bar too high, you look at it, and you walk
away," says John Perry, an emeritus professor of philosophy at Stanford.
"Perfectionists aren't people who do something perfectly. Perfectionists
are people who fantasize about doing something perfectly."

At its core, procrastination
represents shoddy treatment of the one person who should matter most to you:
the future you. Hal Hershfield, a marketing professor at UCLA's Anderson School
of Management, used MRIs to demonstrate that people view their future selves
much as they view a stranger. (This is why we smoke, fail to save, and order
the red velvet cheesecake at the Cheesecake Factory.) Resolving not to do some
odious task today makes procrastinators feel good, says Pychyl. Then they
predict they'll feel just as good tomorrow, which will make the task easier. Of
course, the next day they feel worse, which makes the task harder and the
stress greater. Homer Simpson summed it up neatly: "That's a problem for
future Homer. Man, I don't envy that guy."

That same disregard for their future
selves often leads people to cram their calendars with appointments. This
allows them to take the neurochemical hit of pleasure that comes from
scheduling something today--and to suffer the consequences of five back-to-back
meetings next month.

Counterintuitively, even work can be
a form of procrastination. Scientists in the Netherlands coined the phrase
bedtime procrastination to describe the tendency to keep doing things,
including work, long after you intended to go to sleep. Entrepreneurs may
succumb to this sort of procrastination when it comes to reading to the kids or
taking vacations--activities you know are good for you but that, on some
subconscious level, seem self-indulgent when compared with work. Here too the
present self cheats the future self, as insufficient sleep and leisure affects
performance.

Despite its bad rep, procrastination
has its apologists. Two years ago, Stanford's Perry published The Art of
Procrastination: A Guide to Effective Dawdling, Lollygagging and Postponing,
which posits that procrastination--like cholesterol--is not all bad. He coined
the phrase structured procrastination to describe the act of doing things
that--while not top priorities--still have value. "I think that's a
pattern of work a lot of very creative people have," says Perry. "If
you went through history and eliminated all the plays that have been written
and inventions that have been created by people who were supposed to be doing
something else, you might not have much left of your civilization."

Focus on Progress, Not on To-Dos

To-do lists
are daily reminders that you're not cutting it. Just half of all to-do-list
items are completed within a day, and 41 percent are never completed at all,
according to data compiled by one productivity-tracking company. That's a
problem, because energized, motivated people are more productive than depressed
ones. And what is more demotivating than seeing uncompleted tasks hanging on
and on and on like outdated inventory?

To-do lists are problematic for
other reasons. For one, they can be mentally gamed. When it comes to the
pleasure of getting things done, people are like rats repeatedly pressing a bar
because it stimulates their reward centers. Many people who have finished tasks
not already on their to-do lists will add those tasks retroactively for the satis­faction
of crossing them off. They may even slot previously unscheduled events--after
they've happened--into their calendars. There's also a temptation to mentally
redefine everything you do as valuable and credit yourself accordingly.
Stanford's Perry describes his own to-do list: "It says: Wake up. That's
worth a check. Get out of bed. That's worth a check. Make the coffee. That's a
check. Drink the coffee. That's a check. By the time I've had my coffee I've
done four things and I feel like a real effective human being."

More practically, the rigid,
reductive format of to-do lists is not optimal for the kinds of work done by
leaders, says Teresa Amabile, a professor and director of research at Harvard
Business School. "The really important things that don't generally have a
specific deadline may be what you should be spending most of your time
on," she says. "I think many of us who have a strong work ethic feel
like we are indulging ourselves when we do that more exploratory work, that
deep-level learning that may not have an immediate application but, in the
grand scheme of things, may be more important than anything else."

In her book The Progress Principle,
Amabile emphasizes progress (moving forward with one's work) over productivity
(getting things done well and efficiently, irrespective of their importance). A
sense of making meaningful progress, she found, has much greater positive
impact on engagement and motivation. Her latest research--not yet
complete--suggests that the simple act of looking back on progress also
positively affects your sense of accomplishment and how competent and effective
you feel at work. For the new study, Amabile signed up people to work for two
weeks. Some kept diaries in which they recorded at least three sentences a day about
how much they had done. Those subjects who were able to review their entries
were more satisfied with the progress they had made and in their own abilities.

The positive feelings derived from
reflecting on accomplishments, in turn, improve productivity. Francesca Gino,
also an HBS professor, asked some employees at an Indian company to spend 15
minutes at the end of each day writing about what had gone well. The group that
took time to reflect had a performance level 23 percent higher than that of employees
who spent those last 15 minutes simply working. If reviewing incomplete to-do
lists brings us down, it appears compiling have-done lists bestows a sense of
satisfaction and enhances performance.

The power of reflection is the
premise behind iDoneThis, a startup that inspires people to accomplish more
every day by providing a mechanism to report what they have done. (Zappos,
Uber, Reddit, and other companies have used the product, chiefly to improve the
performance of teams.) "If you are working on one thing all day, it is
very easy to remember what you did and give yourself credit for it," says
CEO and co-founder Walter Chen. "But if you did 20 things and one is have
a conversation with your kid and one is put out a fire, it's often hard to
remember those things." Pausing to reflect is an opportunity to remember
those accomplishments and to recognize their value. "Giving yourself
credit helps you feel productive," says Chen, affirming, "That
actually makes you more productive."

Bottom line: To-do lists are useful
for organizing and prioritizing work. But you should also maintain a "have
done" list--or at least reflect on your accomplishments for a few minutes
at the end of each day--to keep yourself motivated.

Beware
of Time Thieves

Ownership is a management buzzword
that, sadly, is rarely applied to people's time. Workplace culture often
requires that you sacrifice time for others, whether that means acting as a
mentor or maintaining an open-door policy. The benefit to others' productivity
often comes at a cost to your own.

Most people have just two really
productive hours a day, says Dan Ariely, a professor of psychology and
behavioral economics at Duke and co-founder of Timeful, a time management app.
(See "Four Great Productivity Apps," page 45.) Those two hours might
be sufficient if they belonged entirely to you. But even the boss can't
schedule every meeting so that it falls outside his or her optimal
nose-to-grindstone stretch. And in flatter organizations, more people have
roughly the same claims on the company's collective time resource. "The
biggest change in the calendar from paper days to computer days is that,
because we now have shared calendars, people can kidnap our time," says
Ariely. "It's really kind of a shocking idea."

Still, most people would rather work
alongside others than not, because humans are social creatures. When others ask
for your time, saying yes feels good and is easy. Saying no feels bad and is
hard. "All of us want to be nice, and all of us want to be team players,"
says Kory Kogon, global productivity practice leader at Franklin Covey and
co-author of The 5 Choices: The Path to Extraordinary Productivity. At one
typical company that Kogon advised, "the COO said to me, 'We are a nice
organization, so nobody knows how to say no,' " she recalls. "Of
course he does say no. But he doesn't feel like he is saying no enough."

Greg McKeown, author of
Essentialism: The Disciplined Pursuit of Less, recommends extreme selectivity
as a check on your desire to always be accommodating. McKeown likes to ask
people to imagine they have no to-do list, no inbox, no schedule of
appointments. "If you didn't have any of that, and you could do one thing
right now that would help get you to the next level of contribution, what would
you do?" he asks. "Maybe all the stuff you're doing should be
questioned. Start from zero every day. What would be essential?" People
require space and clarity to identify what matters, McKeown explains, and what
matters should dictate what you say yes to. "You can say, 'I would love to
do that, but I am already doing this,' " he says. "And that is
completely true and understandable, because you are."

On the face of it, McKeown's advice
seems at odds with that of Adam Grant, the Wharton professor whose best-selling
book Give and Take has made generosity a hot topic in corporate corridors.
Grant argues that helping others with no expectation of return can increase energy and well-being
and, consequently, productivity. But, like McKeown, Grant advocates
selectivity: saying yes only in instances when distraction is minimal and the
benefit to others outweighs the cost to self. McKeown calls this practice
disciplined generosity.

Bottom line: Although it feels good
to say yes, be disciplined about the time you give to others. Employees and
partners need your help, but mostly they need you to concentrate on what
matters.

Be
In-the-Moment With Everything You Do

Every businessperson knows that you
have to distinguish, in the words of Dwight Eisenhower, between the
"important" and the "urgent." But demands on your time
don't come with labels indicating their level of priority. The important, the
urgent, and the trivial rush past in a blur. When Franklin Covey recently
surveyed 350,000 people worldwide, respondents confessed to spending 40 percent
of their time on things that are unimportant or downright irrelevant. But many
don't know exactly how they are wasting their time, says Franklin Covey's
Kogon.

Perhaps it's not surprising people
are so confused. McKeown observes that when the word priority entered the
English language in the 1400s, there was no plural form. Today, you moan about
being distracted by everything you could be doing. But there are also more
things you arguably should be doing, such as developing your talent pipeline or
studying the competition. Those things cry out to you, like voracious baby
birds. Your mind is not quiet. The noise hurts.

Mindfulness--which sounds new age-y
but doesn't have to be--is increasingly held up as a way to improve both
performance and decision making. Scott Eblin, author of Overworked and
Overwhelmed: The Mindfulness Alternative, defines mindfulness as awareness plus
intention. "If you are aware of what you are thinking and feeling and what
is going on around you, then you can manage the gap between that and your
actions," he says. Mindful people don't ignore noise and
distractions--that's impossible. But they exert discipline to control what Buddhists
call their restless and unsettled "monkey minds." "You have to
be aware of all the mental chatter," says Eblin. "That's the first
step toward quieting it."

Mindfulness is particularly
effective at thwarting that bane of productivity, the fallacy of sunk costs.
The more time, thought, and energy you expend going down a road, the harder it
is to change course when the destination looks dicey. New research from Insead
and the Wharton School shows that subjects who meditated were much more likely
to abandon a lost-cause project than those who did not. Cutting bait fast is
critical, because lost causes waste time and, Eblin says, "because regret
kills productivity." He recommends avoiding regret by having individuals
and teams subject their failures to after-action reviews, like those conducted
by the military. "That way it becomes, what did I learn from this?"
says Eblin. "You reframe it as retraining. And retraining, of course, is
productive."

Another advantage of mindfulness is
that it concentrates attention on the qualitative, rather than quantitative,
aspects of work--why am I doing this? instead of how much of this am I doing?
"To me, productivity is the wrong focus," says Wharton's Grant. What
you want is to be maximizing quality or usefulness. "I think a lot of
people accept the goal of being productive," says Grant. "And that's
counterproductive.

Here’s what countries and executives need to know
to benefit from the next—and markedly different—wave of globalization.

There has been a
steady drumbeat of reports in
the press and elsewhere that the heyday of globalization is over.1 Since the financial crisis, growth in global trade volumes
has slowed. Global financial flows are hanging at levels almost 70 percent
below their peak.2 Meanwhile, rising wages in China and shifting energy
dynamics have challenged lengthy global supply chains.3

These crosscurrents
are real, but our research suggests that they won’t undermine globalization’s
long-term trajectory.4 Cross-border flows of goods, services, finance, people,
data, and communication will expand in all plausible scenarios during the years
ahead (Exhibit 1). What is changing dramatically is the mix of
flows. Their networks and structures are evolving rapidly and will be radically
different from those of the past.

Foreign direct investment and trade in goods
used to account for the greatest volume of flows, which mostly streamed between
advanced economies. Trading partners were primarily neighboring or nearby countries.
Today, this trend is being upended: emerging markets are swiftly closing the
globalization gap with advanced economies, and emerging players are now sources
of consumption and innovation as well as production. New regional hubs are
coalescing around the world to facilitate flows of goods, services, and money
in an expanding global network. And new types of flows are growing rapidly:
information is now gushing to often-underserved areas (such as western Africa,
which is part of a network of new international undersea-cable routes), while
knowledge-intensive goods have become the fastest-growing traded flow across
the globe.

Digitization is at the heart of these changes
because it enables new business models using cheaper and modular cloud storage,
video streaming, or talent-sharing services. Digitization enables some
companies to grow quickly into what we call hyperscale businesses, extending
their reach to global markets at low cost. (For more, see “Competition at the
digital edge: ‘Hyperscale’ businesses,” forthcoming on mckinsey.com.) Digital
technologies, meanwhile, transform flows of physical goods into digital flows
that can not only be traded farther and faster but also tracked precisely,
which will bolster global supply chains. Finally, cheaper computing power and
communications technologies are becoming the building blocks of robust digital
platforms that increase the global participation of otherwise excluded small
and midsize companies (see sidebar, “The new shape of globalization”).

Governments (which are responsible for shaping
trade policies) and companies should take close note of the shifting landscape
and move quickly to adapt. The winners in the new era of globalization will be
organizations that can reallocate resources while quickly adopting strategies
and policies to take advantage of the trends.

The globalization gap

Globalization boosts GDP growth and opens
avenues to rising corporate profits. We examined this dynamic and discovered
that when countries increased their level of globalization by 1 percent (as
measured by the scale of flows of goods, services, finance, people, and data
relative to the size of their GDPs or populations) the rate of GDP growth rose
by about 10 to 15 basis points, a material figure. Overall, we estimate that as
much as one-quarter of global GDP growth comes from global flows. It’s
important for leaders of companies and countries to understand their
relationship with the shifting nature and pace of globalization.

Advanced-economy
multinationals

Companies from advanced economies have thus
far been globalization’s leaders. Some generate more revenue outside their home
countries than within them. But greater changes are looming. Despite a leading
position in globalization, most such multinationals are still underweight in
emerging markets, which represented only 19 percent of their revenues in 2013. Trade
in developing markets will continue to swell—by 2025, it will represent 47
percent of global consumption. Multinationals should accelerate their inroads
to secure a strong position in global commerce. And they’ll need to do so
quickly because they face a new breed of competitor: multinationals that are
rising in emerging countries and hope to win their own place on the global
stage.

Traditional global
companies took years to deploy resources on a global scale. They will need to
accelerate that pace not only to keep up with players from emerging markets but
also because digitization is ratcheting up the global economy’s clock speed.
Consider how digitally born companies, such as Facebook and Google, now earn
more revenue from global markets than from the United States.

Multinationals from
emerging markets

A number of companies in emerging markets are
embracing globalization—swiftly expanding abroad and gaining market share,
particularly in other emerging economies. A telling signpost: the value of
cross-border goods flows between emerging markets increased from 6 percent of
all global trade in 1990 to 24 percent in 2012. Even so, only 40 percent of the
revenue of the 100 largest listed companies in emerging markets comes from
overseas, versus 51 percent for the largest listed companies in advanced
markets. Moreover, while multinationals from emerging markets have expanded
into the United States and Europe, they have done so largely through M&A.
Such companies have yet to distribute their operations globally, and the data
show that their supply chains are more local than those of their peers in
advanced economies

.Small and midsize companies

Smaller enterprises
add a new dimension to global competition as they begin expanding across
borders. Internet platforms are empowering these “micromultinationals,”
enabling them to find customers, suppliers, funding, and talent around the
world at lower cost. One data point: digital platforms can cut the cost of
exporting by 83 percent as compared with traditional export channels.5 Even small companies can access international markets: in
2013, eBay analyzed a sample of its small sellers and found that more than 95
percent exported to other countries, compared with an average of less than 25
percent of traditional small businesses—and eBay merchants export to customers
not just in one market but in dozens. Still, most smaller companies today
haven’t taken full advantage of digital capabilities in developing their global
reach. Across the world, they consistently account for a smaller share of
exports than of value added.

Countries

Open, developed economies have been both the
rainmakers for globalization and its largest beneficiaries. The case of Belgium
illustrates the challenges they face going forward. The country is globally
connected, with trade flows three times greater than its share of world GDP,
and globalization is responsible for a third of GDP growth. According to our
research, the country’s central position in the network of flows makes it more
likely to capture benefits from trade than other countries are. Yet Belgium is
trending toward a current-account deficit, and in recent years, it may have
under-invested in areas that would take advantage of that position—not only in
traditional trade, but also (and particularly) for new flows. Furthermore,
while Belgium’s physical port infrastructure in Antwerp still compares well
with that of neighboring Rotterdam, the Netherlands has invested dramatically
in a virtual-port infrastructure in Amsterdam, which is now a leader in
cross-border data flows.

New strategic options

Progress toward globalization’s new era will
be uneven for economies and companies alike. Since many types of organizations
could deepen their cross-border activities, the priorities include combining a
more intense kind of digitization with a network view of the global landscape,
seeking opportunistic positioning in hubs bursting with talent and
capabilities, taking full advantage of intangible assets that can help
companies differentiate themselves among new customers and markets, and
becoming better attuned to the emerging new cross-border competition.

1. Nurture global
ecosystems

Digital platforms enable companies to expand
rapidly and profitably to customers far beyond home markets, while nurturing
new ecosystems that span borders and connect clusters of suppliers,
distributors, and after-sales services. The benefits will include lower-cost
procurement and better preemptive maintenance for plants, reducing downtime.
Boeing’s Edge offering, for instance, brings together the vast amounts of data
the airline business generates, thus creating a real-time information network
linking aircraft assets with maintenance groups, operations staff, suppliers,
and passengers.

Other global ecosystems are facilitating
innovation by linking researchers, financiers, and even customers to
crowdsource new ideas. AstraZeneca’s digital open-innovation platform, for
instance, aims to connect the company with scientists and academics at research
institutes worldwide. German equipment maker Bosch uses its innovation portal
to connect with individual and institutional researchers in key business areas,
such as power tools, new materials and surfaces, and the automotive
aftermarket.

2. Locate in the best
hubs

Many countries and
cities have established themselves as hubs for specific types of flows.
Locating within these vibrant centers can buttress a competitive advantage.
Amsterdam, for instance, with some of the world’s fastest and cheapest
broadband connections, has become a magnet for Internet companies. Another hub,
not far from Amsterdam, is Eindhoven’s Brainport, which boasts a concentration
of expertise for broadband deployment, applications, and other skills. With
8,000 researchers, developers, and entrepreneurs scattered among small and
midsize companies and global players, Brainport accounts for a third of private
R&D outlays in the Netherlands.6 In density of patents, it is one of Europe’s top three
regions.

People flows will
continue to be an important source of growth and innovation, and here the
United States is top ranked. Immigration has long enabled US businesses to
strengthen their competitive advantage by attracting global talent from every
nation. The impact of foreign entrepreneurs in Silicon Valley is legendary:
from 2006 to 2012, immigrants founded over 40 percent of all high-tech and
engineering start-ups there.7Global flows also allow pockets of specialization to develop
beyond high tech. In 2012, Switzerland—a global hub for knowledge on watch
manufacturing—produced 95 percent of luxury watches (those priced at over 1,000
Swiss francs).8

Companies without a strong presence in influential
hubs should consider moving operations to one or more of them. A leading
example of the trend is Singapore, where many multinationals have located to be
at the nexus of Asian flows of goods, services, and finance. Singapore has the
world’s highest density of regional head offices relative to GDP: more than
half of all large foreign subsidiaries in emerging Asia outside China are
located there. P&G, for example, chose it for the global headquarters of
its beauty and baby-care divisions. Rolls-Royce moved its marine business from
London to Singapore for the city’s advantages as a shipping hub.

3. Build digital
platforms and exploit proprietary assets

Digital platforms are connecting companies and
customers, suppliers and companies, talent and jobs, and entrepreneurs and
funding—and in ways that were all but impossible only a decade ago. Effective
platforms benefit both the participants using them and the companies operating
them.

E-commerce sites that
connect businesses to consumers are signature examples of the new platform
power. Global e-commerce sales reached over $1.2 trillion in 2013, nearly 2
percent of global GDP.9 E-commerce provides new access to consumers for companies
of all stripes and offers buyers more choice (and often lower prices). Alibaba,
China’s leading e-commerce platform, includes B2B, B2C, and P2P (peer-to-peer)
marketplaces. It posted merchandise worth approximately $248 billion in
2013.These online platforms are highly profitable as well.

Other platforms now
channel flows of knowledge and expertise to companies around the world. One
well-known example is InnoCentive, an online innovation-crowdsourcing site that
has reported a membership of 300,000 registered “solvers” in over 200
countries. Today, it has helped large R&D-intensive companies (in
industries such as pharmaceuticals, biotechnology, and consumer products) to
crack as many as one-third of a sample of knotty problems they had previously
considered unsolvable.10 Meanwhile, the staffing websites launched by oDesk and
Elance, both based in Silicon Valley, connect employers with freelance
professionals around the world. The two companies merged in 2013, creating a
platform used by 2 million businesses and 8 million freelancers.

Many companies have
assets that could be deployed more effectively to build such platforms. These
may be tangible assets, such as routers and servers, logistics networks, or
distribution centers. But they can also be intangible brands, data, and
knowledge. The brand position of companies such as Citigroup and Nike
undergirds their global reach, as do their data and knowledge of customer
preferences around the world. Starwood Hotels & Resorts, the global
hospitality group, is brandishing its digital expertise to expand its brand and
customer loyalty. Its mobile app books rooms in any of the chain’s hotels,
offers personalized suggestions for dining and entertainment, and even allows
users to check in and to open the doors of hotel rooms remotely .

Digital assets are especially
important to the new wave of globalization. Our research shows that tangible
and intangible digital assets will account for roughly a third of total global
GDP growth in the future.11 Consider the extent to which Google’s search algorithm or
Amazon’s recommendation engine underwrites global knowledge and bolsters
commerce.

4. Be ready for new
competitors and challenges to business models

Along with helping
smaller businesses everywhere and companies from emerging markets increase
their participation in global flows, digitization will put tremendous pressure
on business models. To succeed in the new environment, companies will need to
define and choose their businesses, their customers, their suppliers, and their
ecosystems quite nimbly.

Already, we can see how Internet-enabled lower
barriers to entry are creating new twists in competition: companies that
initially disrupted entire industries with first-stage digital technologies are
now being disrupted themselves. Web-based travel companies launched in recent
decades, for example, now face tough and growing competition from a new digital
business model represented by app- and web-based Airbnb. The peer-to-peer
hospitality site, launched in 2008, now offers rooms in more than 34,000 cities
worldwide. Airbnb’s customers research, reserve, pay for, and review their
lodgings—bypassing traditional digital travel sites.

New forms of competition will arise from three
sources. First, established companies from emerging markets will expand to
operate on a global scale. Second, smaller companies around the world can now
compete in niche markets globally, thanks to digital platforms. Finally, new
competition will come from players outside traditional industries—as is the
case, for example, with e-commerce companies, like Alibaba, which are
disrupting banking and payment systems.

The potential for
disruption shouldn’t be underestimated. According to research by the McKinsey
Global Institute, the number of Fortune Global 500 companies with headquarters
in developed economies will fall to less than 55 percent by 2025, from almost
75 percent in 2013.12 Seven out of ten new large companies will come from
emerging markets over the same period.

Small entrepreneurial
companies from emerging markets already are joining the fray and showing the
potential to grow. One of the new breed is Jumia, a Nigerian e-commerce company
that now operates in seven other African countries, including Egypt, Ivory
Coast, Kenya, and Morocco. M-Pesa, a now-famous mobile-money service that
started in Kenya, currently has 19.3 million users.13 What’s less known is how M-Pesa
is disrupting banking and payment businesses in a growing number of countries:
it has expanded across Africa and South Asia and in 2014 entered Eastern
Europe. Start-ups active in peer-to-peer lending are another potentially
disruptive segment in finance. Chile’s Cumplo, China’s Pandai, and Germany’s
Auxmoney all facilitate P2P loans, challenging a host of traditional financial
institutions.

5. Create new
businesses that combine and transform global flows

In the new era of globalization, pressure to
create new business models and redefine the borders of companies and markets
will increase because digital technologies make it possible to transform and
recombine flows.

Many physical goods are now virtual thanks to
digitization. Books and movies, for example, once moved from country to country
solely by ship, truck, or train. Today, they can digitally whiz across the
globe in an instant. This pattern of transformation may be only in its infancy.
In some areas of manufacturing, for example, 3-D printing will probably have
the same profile: product design files can be sent across the Internet, and
goods will be “printed” locally rather than manufactured in one country and
shipped to another. This development will create space for new business models
and for companies that will become the Amazons or Alibabas of 3-D printed
goods. (For more, see “Are you ready for 3-D printing?,” forthcoming on
mckinsey.com.)

Digital “wrappers”
that embed information within a good or service can also increase the value of
physical flows. Radio-frequency identification (RFID) technology is the
best-known example. From 2005 to 2012, the use of tags to track shipments of
goods has grown nearly three times faster than global goods flows.14 These tags improve the efficiency of global supply chains
by reducing losses in transit (in some cases, by up to 14 percent)—and they may
cut inventory costs by up to 70 percent.15

In the growing global peer-to-peer arena, Etsy
is an example of a company creating a new business model by straddling digital
and physical flows. Its online global marketplace connects over 40 million
buyers and sellers of artisanal goods and handicrafts. The company also wraps
knowledge and other services into its distribution channel: it offers
entrepreneurial education to artisans and has a partnership with the
crowdfunding site Kiva to help finance the growth of their businesses.

Companies that have seen their global
activities struggle in the wake of the financial crisis can take heart that
what they have witnessed is likely to be only a pause and not a break in the
progress of globalization. Yet they’ll need to up their game—and quickly.
Traditional competitive engines are proving ill adapted to a world of flows
moving at digital speed.

The Yu is the only handset available in India
preinstalled with CyanogenMod ­ an open source Android variant that allows
users to customize the interface using different themes and components,
including the status bars, icons, controls, and fonts.

It boasts of a large HD-resolution screen and
support for dual SIMs. What you also get is 16GB storage and a microSD card
slot. So if you use your phone for music and movie playback, this extra space
is a huge advantage. Additionally, it supports USB OTG.

This sub-10k smartphone packs in hard ware that
performs as well as handsets that cost more than double its asking price when
it comes to tasks like web browsing, e-mailing and social networking.Similarly,
3D games like Frontline Commando 2 and most Full HD video formats run smoothly
without any stutter or lag.

The output of its dual cameras is sharp enough to be
posted on the web, though the colours seem washed out and with some softening
of details. Turn on the flash, however, and you get snapshots that retain
minute details under zoom.

Call quality is clear and GPS works accurately for turn-by-turn
driving.

The Yu's speaker output is not loud or clear. Also
the placement of the single speaker grill at the rear of the device usually
gets blocked when held in the hand, and this muffles the sound further. Use
this device with headphones and you won't face any problems.

The biggest drawback of this handset is its battery
life, which will last you for about a day with basic tasks. But play games or
videos and you will find yourself reaching for the charger every few hours.

What the ratings mean: Below 5: The product is poor
and doesn't offer the experience it promises | 5 and 6: The product works as
advertised | 7: The product is good; will not disappoint the buyer | 8: The
product is very good; super value for money | 9: The product is exceptional |
10: You're kidding, right?

OBI ALLIGATOR S454

The Alligator is the smallest smartphone on test
here. It looks plasticky, but sports a sturdy build.Its compact size makes it a
comfortable fit into any pocket, although those with large hands might find its
virtual keyboard too cramped to type.

This device works well enough for tasks like
messaging, web browsing and listening to music.Voice calls are loud and clear.
But heavy games and movies might result in lag, and at times even the
touchscreen response gets sluggish.

In keeping with its modest specs, there is almost no
customization to the Android interface, and very few apps (Notebook for note
taking, Hungama for online music, and Truecaller to identify unsaved numbers)
are pre-loaded on it.

Its display is bright and offers decent viewing
angles, but its low-resolution does not match up to the clarity offered by the
Lenovo A6000 and Yureka.

The camera, which includes the stock tools to
capture and edit photos, takes average shots.The results appear soft and
low-light photos suffers from grain. Still, these images are good enough for
sharing on the internet.

Lastly, we would have preferred a better battery.The
S454 gives you less than a day's service with basic tasks. The lack of any
power management settings means you will need to charge the device more than
once daily.

LENOVO A6000

The A6000 is a smart-looking handset with a
rubberized back panel that allows for better grip and handling.It sports a
bright display that renders vibrant colours and crisp text. The 5-inch
touchscreen is just right for browsing and reading, while the virtual keyboard
is spiffy and trouble-free.

The device is capable of clear phone calls, handling
everyday productivity tasks, and the odd 3D game, but stutters and lags when
multiple services run in the background.

The A6000 runs Vibe, a user interface that includes
pre-loaded apps ­ ShareIt and SyncIt ­ to facilitate content sharing and
contact syncing. These are visually intuitive and useful. However, its camera
interface is just the opposite ­ basic settings are hidden deep within the menu
and include terms like “ZSL“ and “Wavelet Denoise Mode“. Its shooters, however,
are slightly better than the ones on the Obi, but you will find some shutter
lag, which makes it tough to shoot action photos.

This smartphone comes with thirdparty apps like
Guvera for music streaming, a Lenovo security tool, txtr for e-books, voice call
recording, and a Dolby audio enhancement, which lets you configure your sound
profile depending on what you are listening to. Coupled with dual speak ers,
the A6000 makes for a decent entertainment device.

Like other devices in this price band, the A6000 is
plagued by a dismal battery life that will require you to carry along your
charger for a full day's use.

The Mach One is almost the same size as the Obi
S454, but offers a larger and higher resolution display . The handset also
sports similar processing hardware.

While the screen is not as bright as the other
phones on test here, it offers better colour contrast. On the flip side, it is
not very legible in direct sunlight even with brightness set to maximum.

The Mach One packs some useful features like smart
gestures that let you launch apps from the lockscreen itself, use twoas well as
three-finger gestures on the homescreen to adjust volume, start the camera,
take a screenshot and more.

It does a fairly decent job of playing high-def
videos smoothly and is good enough for games like Redline Rush and Subway
Surfers.

Like the Obi, this handset's camera uses Android's
stock interface with basic scene modes and filters. It also shoots average
pictures that lack detail, but are good enough for sharing on the internet.
Interestingly, its front-facing camera is paired with a flash, in case you have
a thing for shooting selfies in the dark.

The S310 give you almost a day's use on a single
full charge of its battery, thanks to its energy-saving “stamina mode“.

There are several ways to make biryani ­ each style loyal to its
local gastronomic history. Here are the India-specific ones that every rice and
biryani lover should know about

The masses love it, politicians woo voters with
it, and festivals are incomplete without it -the delicious biryani is the
favourite of all. India has a wide variety to choose from when it comes to this
royal dish. Top chefs talk about the distinctive features of each biryani, and
what makes them special...

HYDERABADI BIRYANI

Andhra Pradesh: Hyderabadi biryani is one of the
most popular dishes in south India. For many home cooks and chefs, this dish
from Mughlai cuisine is quite a challenge to make, and each has his unique way
of spicing it up. What makes it stand out is the usage of saffron and coconut.
This biryani is cooked in layers ­ the most challenging part in its creation.
While most other biryanis are always dominated by mutton and chicken gravy,
here the saffron-mixed-rice takes over. Serve it with brinjal gravy.

DINDIGUL BIRYANI

Tamil Nadu: This one's a favourite in Chennai
with many outlets dedicatedly serving just Dindigul biryani.The rice used in it
is very different ­ jeera samba rice instead of Basmati, giving it an entirely
new flavour.The biryani also uses cube-sized muttonchicken pieces instead of
big chunks. Apart from the usual masala, a lot of pepper is used.

AMBUR BIRYANI

Tamil Nadu: It's hard to miss out on the Ambur
biryani if you are in Tamil Nadu. Take a trip to the sleepy little town of
Ambur and the first thing that'll strike you is the innumerable biryani stalls
dotting the Chennai-Bengaluru highway. There's chicken, mutton, beef and prawn
as options, with the flavour of mint and coriander standing out. The highlight
of this biryani is the fact that chefs soak the meat in curd before adding it
to the rice, which imparts a unique taste to the dish. Have it with onion raita
and brinjal gravy.

BHATKALI BIRYANI

Coastal Karnataka: Though low on spice, the
Bhatkali biryani has the right amount of flavour. This particular style
originated from the Nawayath Muslim community of Bhatkal, in coastal Karnataka.
They use a lot of onions, green chillies in their style of cooking ­ also in
the layered format. Unlike Ambur biryani, in which mutton pieces are soaked in
curd, Bhatkali biryani chefs cook muttonchicken pieces in curd. This eventually
makes the biryani less spicy.

LUCKNOWI BIRYANI

Uttar Pradesh: Based on the Persian style of
cooking, the Lucknowi biryani is made with the use of a completely different
method known as dum pukht. As is the norm with most Persian formats, the meat
and gravy are partially cooked and then layered in the dum pukht style.Served
in a sealed handi, Lucknowi biryani is light on the stomach as it is low on
spices.

KOLKATA BIRYANI

West Bengal: Kolkata biryani has its roots in
the Nawabi style biryani of Lucknow. The chefs from Awadhi kitchens brought the
signature biryani recipe to Kolkata, which later got tweaked into the unique
Kolkata biryani that we know today. The Kolkata biryani is unique, thanks to
its subtle use of spices combined with ghee, Basmati rice and mutton. The
addition of potatoes and boiled eggs also lends a different flavour to the
dish. Use of nutmeg along with saffron and kewra gives this biryani its
signature aroma.

MALABAR BIRYANI

Kerala: Malabar biryani, famous in Kozhikode,
Thalassery and Malappuram areas of Kerala, is characterised by the unique variety
of rice called khyma rice, the rich flavour of spices, and the generous usage
of cashewnuts and raisins. Chefs in Kerala add these ingredients generously
while preparing the biryani. The key difference lies in the method of
preparation. The rice is cooked separately from mutton gravy and mixed well
only at the time of serving.

SINDHI BIRYANI

Pakistan: Sindhi biryani, which originated in
Sind, Pakistan, is quite spicy and zesty. Sour curd, generous use of spices and
chilli mark this form of biryani. Usage of kewra or mitha ittr is another
differentiating factor. Sindhi biryani recipes also use potatoes and prunes.

BOMBAY BIRYANI

Maharashtra: What makes Bombay biryani special
is the use of potatoes in it. Be it vegetarian or non-vegetarian biryani,
potato is a must. The preparation uses a layered method, where half-cooked
basmati rice and cooked meat are put on dum-style.